Government Of Dubai Gives Dubai Islamic Bank The Final Nod On Tamweel (26 September 2010)

Dubai Islamic Bank increases its stake in Tamweel to 57.33 percent

With the full support of HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, the Government of Dubai has given the final nod to Dubai Islamic Bank (DIB) to increase its shareholding in Tamweel to 57.33 percent, allowing the bank to become the largest shareholder in one of the region’s largest mortgage providers.

This strategic move is the culmination of intensive efforts over the past few months to resolve the stalemate at Tamweel that will allow the company to resume its core activity of providing mortgages and real estate financing. The move will give new momentum to the local mortgage market which has entered a recovery phase after a series of decisive measures taken by the government in the wake of the recent global financial crisis.

Dubai Islamic Bank’s move to increase its stake in Tamweel is another step in the realization of Dubai Government’s vision to activate all stimulants to economic growth, and its ongoing support of development efforts across various sectors towards achieving strategic economic and social objectives for the United Arab Emirates.

Earlier, a resolution was passed by the Cabinet headed by His Highness Sheikh Mohammed bin Rashid Al Maktoum to form a committee chaired by His Excellency Sultan Bin Saeed Al Mansouri, Minister of Economy to examine and assess a number of Public Joint Stock Companies including Tamweel. Following from that immediately, an executive committee was put together to oversee work and monitor progress at Tamweel. The executive committee also worked closely with all parties concerned to develop best possible solutions for Tamweel, and to finalize an agreement that would preserve investor interests while creating fresh growth incentives for the company.

This key agreement is the result of the combined efforts of all parties that participated in the preparation and conclusion of this agreement not the least of whom are the members of the executive committee overseeing the restructuring process of Tamweel, as well as the invaluable cooperation of all related bodies spearheaded by the Ministries of Economy and Finance, and the Central Bank of the UAE, the Emirates Securities and Commodities Authority, and the Dubai Financial Market who all played important roles in bringing along this resolution.

The deal effectively renders Tamweel a subsidiary of Dubai Islamic Bank which is now its biggest shareholder at 57.33%. Founded in 1975, DIB is the oldest Islamic bank in the world, and the first to provide comprehensive Islamic banking services.

The endorsement of this transaction by Dubai Government is another testimonial to Dubai Government’s continued commitment to finding incentives for further development of all economic sectors across the UAE.